X-raying Kenya’s Second Stab At Cashless Public Transport After Botched First Try

5 days ago 20

Talks of resurrecting Kenya’s failed “cashless matatu” effort have gone beyond mere talk. And this time, some would be hoping the second time’s the charm.

The matatu (the name for public minibuses in Kenya), has done this dance before.

After the National Safety and Transport Authority (NTSA) advertised a tender for cashless platforms for payment of fares in Public Service Vehicles (PSVs) in June 2020, the State Authority has now taken a big step.

As of now, the NTSA has issued licenses to 29 companies that have set sights on the reported KES 2 Bn (USD 18.18 Mn) in annual fees from the nearly estimated KES 240 Bn (USD 2.18 Bn) in annual revenues.

The companies include the likes of Safaricom, NCBA, JamboPay, Cellulant, KCB, and Little Cab’s parent, Craft Silicon.

Presumably fast-tracked and influenced by the spread of the pandemic, the digital fare collection system, which has set the stage for the ban of cash in the transport sector, is expected to have contact tracing capabilities.

By design, once installed, PSV users will be expected to pay for their transport via mobile money platforms, giving the government access to their identities, phone numbers, and personal information which are crucial for contact tracing.

At the moment, Kenya appears to be chasing a cashless system for its public transport system which has approximately 70 percent of Nairobi’s 4 million residents using the 20,000 semi-formal privately-owned minibuses to get around. However, this endeavour has flopped spectacularly in the past and little has been done to quell the existing scepticism.

When the Kenyan government first set out to take fare payments on public transport digital in 2013, with the goal of total integration and implementation by 2014, it was propped by talks of reining in cartels who had infiltrated the PSV sector. It also sought to track income in the country’s PSV sector for the purpose of more effective taxation.

On paper, the idea was to formalise the industry, curb inefficiencies, cut out corruption, and eliminate the bribing culture by mandating cashless commuter payments. And everyone seemed to love it at first.

In April 2013, Google and Equity Bank partnered to introduce BebaPay, a cashless card payment system that required a Google account and no bank account. People could purchase and top-up their accounts in various locations.

The other payment technologies that sprung up during that time are; KCB Pepea card Safaricom Pay with M-Pesa, Matatu Owners Association 1963 Card, Mastercard Fare Card, Family Bank Pesa mob.

But none of the above platforms existed after one-and-half years, which was how long the “cashless matatu” campaign lasted.

Despite the early optimism, the system collapsed and many of the factors that have been pointed out as the cause can be perhaps best summarised in the words from a BBC report on the subject: “sometimes, it’s a low-tech solution that works the best.”

At the time it was first pushed, it was thought to be Kenya’s latest big, forward-thinking, ambitious technology leap since the roll-out of M-Pesa. Everyone seemed to be on board, from the government, passengers, to the matatu owners association, matatu owners, and bus companies that would rake in more daily revenues after patching all the leaks via cash.

But apparently, some folks were very mistaken about everyone being on board and every box checked on the checklist of “how to make this thing work.” It turns out Kenya’s cashless scheme for PSVs never quite took off before it died out just 18 months after it was rolled out.

What killed it? Or rather, who killed it? Well, it depends on who you ask but the most common explanation is that the system failed due to a lack of consideration for matatu drivers, touts, and the people who do the grunt work generally — all of whom seem to have been alienated by the policy.

Kenya’s StandardMedia also reported that the cashless system denied matatu operators extra cash that they would otherwise not remit to the matatu owners. Hence, the policy was sabotaged.

Besides that, there is also a reckoning that Kenya’s earlier cashless payment system for matatus was doomed by a series of experience-design issues.

Some have stood behind the narrative that the cashless matatu effort was never a problem-solving-oriented contraption, but was rather a generic promotion of the “cashless is good” motto; like a shiny tech is merely a nice-to-have, rather than a need-to-have.

Nevertheless, the ball has been set rolling once again. But instead of the optimism that was the case at the last time of asking, it’s more like the jury is out on the whole plan this time around. Doubts abound due to the likelihood of push backs from the operators and the suitability of the whole arrangement.

Featured Image Courtesy: Behance

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